The Price is Right?
Several top properties sold in the past year after price adjustments.
By Camilla McLaughlin
Now, some other Ultimate Homes are altering prices too.
Land, location and lifestyle translate into value for real estate. At the very top of the market these qualities dazzle, but it is price — the sheer number of dollars involved — that captures the most attention. More than in any of the last six years, the story of ultimate luxury in 2011 revolves around price. Even though it has been somewhat isolated from the recent turbulence of real estate overall, the ultra high end has undergone its own share of ups and downs.
In the last year, an unusually large number of former top 10 properties sold, but for significantly less than their original list prices. Le Belvédère in Bel Air, Calif., on our list in 2009 at $85 million and later reduced to $74 million, reportedly sold for $50 million, the highest-priced sale in 2010.
Other former top 10 properties selling last year include Dunellen Hall, the former Helmsley estate in Greenwich, Conn., listed at $125 million in 2008; it sold for $35 million after several price reductions. On the 2007 list at $75 million, Portabello in Corona del Mar, Calif., stands out as an Ultimate with the most unique amenities. This spectacular waterfront property also was on the cover of Unique Homes magazine in September 2006. After a checkered history, on and off the market, it sold for $34.1 million (plus, according to reports, a $7 million property). Porcupine Creek in Rancho Mirage, Calif., on the 2010 list at $75 million, sold for $42.9 million early this year.
Given these sales prices, a number of former top properties have reduced prices. A C.P.H. Gilbert townhouse in New York City listed last year for $75 million is now offered at $50 million. Hummingbird Nest Ranch in Simi Valley, Calif., also listed last year at $75 million, is now $49 million. Even the very first No. 1 Ultimate Home (in 2005), Three Ponds in Bridgehampton, N.Y., has seen a price reduction from $75 million to $68 million.
And this year’s list includes a new record: bragging rights to what Diane Sawyer described in an ABC broadcast as “the largest price reduction in history for a house.” Beverly House, the former Hearst estate in Beverly Hills, originally appeared on our list in 2008, priced at a record high $165 million. This year it is back on the market, relisted by Hilton & Hyland in Beverly Hills at $95 million.
Despite these price drops, the ultra high end is invigorated at press time, buoyed in part by the recovery of wealth and by the early spring sale of a Los Altos, Calif., home for $100 million to Russian entrepreneur and venture capitalist Yuri Milner. “I am quite encouraged by the activity we are seeing. I can legitimately say I am showing 1220 South Ocean 10 or 12 times a month,” which is a good amount of activity considering prospects have to be qualified, says Jim McCann with The Corcoran Group in Palm Beach, who is listing an estate at 1220 South Ocean Boulevard in Palm Beach for $74 million (it’s on the cover of this issue of Unique Homes). “When we see a $100 million sale occurring anywhere in the U.S. that bolsters the whole high end market,” he says.
This transaction broke the $95 million record set in 2008 by the sale of Donald Trump’s Palm Beach property, and is viewed by agents as an indication of growing confidence in the market. “It shows us that financially savvy buyers are seeing value in current prices and are snatching up top-end properties,” says Sally Forster Jones with Coldwell Banker Residential Brokerage in Beverly Hills, who is listing The Spelling Manor for $150 million (it remains the most expensive listing in the country).
Sorting out the trends
Is it possible to conclude a pattern from any of these sales? Not really, say those who work in these heady price brackets. Referring to the very highest priced properties, Joyce Rey, executive director of Coldwell Banker Previews International in Beverly Hills, says, “This part of the market is so thin, there are so few properties and each one is so unique that it is hard to infer price trends from even a few sales.” Rey is listing two of the top properties this year: Fleur de Lys and Palais des Anges.
Recalling the last several years, when the confidence of even the ultra wealthy foundered, Shari Chase, CEO of Chase International Real Estate in
Lake Tahoe, Nev., says, “It is wonderful to see people stepping up and saying there are only a few places where I can put my money and I think real estate is a great one. Yuri Milner stepping up and buying that property says, ‘I am confident’.”
Even sales in the $40 million and $50 million range earlier this year are viewed as positive indicators. “These are all big numbers and it shows people are not afraid to pull the trigger and buy something,” says Chris Cortazzo with Coldwell Banker Residential Brokerage in Malibu. He is listing La Villa Contenta, a compound located on 8 bluff-top acres overlooking the ocean in Malibu, for $75 million. A couple of years ago, he says, it would have been well over $100 million.
More than price, the motivation of both buyer and seller are often what determines a sale. “Each house is unique and each circumstance for each buyer is unique so a lot depends on the mindset of the seller in each situation and how much a buyer wants a particular property,” observes Rey. “When you get up in to this price bracket the properties are so unique.”
What matters today is the goal of the buyer, whatever they want to achieve with the purchase. “There has to be an underlying desire for a specific property. I don’t think it’s necessarily about the price, but the price is reflective of that moment when the buyer and seller come together and those circumstances change very quickly,” says Chase.
The Ultimate Value Equation
Both Rey and Chase have brokered sales that set records for price. Over the years, what determines value hasn’t changed dramatically. Land, privacy and architectural significance all factor into the value equation. Equally important, especially in today’s global marketplace, is the unique lifestyle a property offers.
With more than 53,000 square feet, The Spelling Manor is the largest private residence in Los Angeles County. Much has been made of the estate’s multiple kitchens, spaces such as the gift wrapping room, extensive amenities and magnificent finishes. But “it’s not any one feature, but all of the features together that make it so special,” says Jones, who is listing the property. “Although it’s grand, it still really feels like a home and the parties who come to look at it can picture themselves really living there. Each time I show it I find something that I just love.”
“It’s not just about bricks and mortar,” comments Chase. In addition to the main residence, Tranquility, listed at $100 million in Lake Tahoe, Nev., includes a private lake stocked with trout, guest and staff residences, an art studio, two over-the-water par-three golf holes and a boathouse pavilion. Still, Chase says, the most exceptional aspect of the property is the sense of balance and peace it engenders. “When you are there, you are floating in this peaceful realm, which is what people strive for today.”
Part of the allure of Tranquility and others on our list is the opportunity to own a private, self-contained world. Beyond La Villa Contenta’s gates, a long gravel drive leads to a main motor court comprised of thousands of black and cream granite stones inter-set with grass. Countless secret gardens, an exotic desert garden and more than 1,000 rose bushes make the landscape an adventure in itself. Especially notable is the natatorium. Glass ceilings more than 20-feet high, a hand-painted gesso mural, panels of intricate seashells and mirrored stars, outrageous shell-encrusted chandeliers resembling octopi and a massive golden onyx fireplace make this Romanesque building almost too elegant to be just for swimming. The pool itself is tiled in Murano glass. In addition to the main villa, there is a separate building housing an office or a potential six-bedroom guesthouse. Tucked into a grove of ferns and lush greenery is a one-bedroom Zen-like retreat.
Ultimate privacy is a given for any of these residences, which often incorporate many ways to play. Bowling alleys, home theaters, discos, putting greens, trout ponds, reproductions of famous gardens, vineyards, even golf courses are not uncommon in the ultra high end. But few have as extensive a list as our fourth Ultimate, Versailles in Windermere, Fla., appearing on our list for the second year. In addition to all the amenities that are pretty much standard in estates priced above $50 million, plans for this home include an indoor roller rink, video arcade, children’s theater, multiple spas and a baseball field. The roller rink and baseball field are a first for an Ultimate list.
Currently under construction and priced at $100 million if finished according to the developer’s plans, this residence is ideal for anyone who travels with a large delegation, says Lorraine Barrett, who is listing the home for Coldwell Banker Residential Real Estate in Orlando. Construction is 70 percent complete, which also gives potential buyers the option to purchase the home for $70 million and complete the interior according to their own specifications.
Legendary is another description often applied to the top 10, and several on our list have been home to legends. Names such as Hearst and Kennedy twine through the history of Beverly House as does those of Los Angeles architect Gordon Kaufman and Paul Thiene, who created the property’s original landscaping. The architecture is remarkable, says Jeff Hyland, the listing broker. Especially impressive is the hand-carved two-story library with wraparound balcony. The original house was built in the 1920s; 15 years ago, the current owner doubled the square footage. In addition to an art deco night club, this property has a huge terrace that seats 400 for dinner. Located on just less than 4 acres, it has, according to Hyland, possibly the longest driveway in Beverly Hills.
Another on the list, a neo-French Renaissance mansion in Manhattan, was originally commissioned by Frank Woolworth to be a home for one of his daughters. Fleur de Lys, second on the Ultimate list at $125 million, is considered to be the finest representation of French culture in America and was recognized by Jacques Chirac and the French government for its architectural significance.
Few U.S. properties articulate the level of European elegance found in Palais des Anges, a $68.5 million French Palladian estate in Beverly Hills. Every facet, every finish has been created specifically for this home. The exterior is finished with hand-carved limestone imported from Portugal. Each of the 66 chandeliers was custom-designed, as was a spectacular stained-glass skylight above the two-story entry. Particularly exquisite is the 24-karat gold gilding in the library and master bedroom. “Everyone who walks through the door is amazed by how gorgeous it is and how it has been done in such beautiful elegant taste. No expense has been spared,” says Jade Mills, also with Coldwell Banker Residential Brokerage, who is listing the residence with Joyce Rey.
Almost impossible to duplicate for each of the top 10 would be the land and location. La Villa Contenta’s acreage resulted from the combination of four lots. The Spelling Manor sits on the site of the former Bing Crosby estate, occupying 4.76 acres of flat land. Just assembling this amount of buildable land between Beverly Hills and Bel Air would be almost out of the question today, says Hyland, who is co-listing the property with Jones. Tranquility is the largest private land holding in Lake Tahoe. Acquiring 210 acres of pine and aspen is almost impossible in Nevada, where the U.S. government owns 95 percent of the land.
Although 1220 South Ocean is newly constructed, the location, 2.5 acres along the Intracoastal Waterway in the heart of Palm Beach, is another almost one-of-a-kind setting. “When I closed off a cul-de-sac street to create the two-and-one-half acre parcel for this setting, I knew I had a magnificent site that would be difficult, if not impossible, to find ever again,” says Dan Swanson, master developer and president of Addison Development.
Resent research shows a growing level of confidence and the intention to purchase more real estate among the affluent. “There are many all cash buyers on the sidelines and we have seen many local buyers as well as an influx of international buyers for these high-end properties,” observes Jones.
And, adds Rey, no matter how high they may seem, compared to prices all over the world, our prices are a bargain.
Hyland’s company is co-listing three of the top 10 and a sale of one would portend well for all three. “When one pops, the others will get really hot,” he says.